Prime Minister Keir Starmer's Government is being urged to take action regarding pensioner poverty by reforming Pension Credit and creating a minimum retirement income by MPs.
The Work and Pensions Committee has issued a comprehensive report urging ministers to establish a nationwide approach to combat escalating poverty amongst retired individuals.
The committee's findings reveal that 2.8 million pensioners currently survive on incomes falling short of the Minimum Income Standard - the threshold required for basic dignified living, representing a sharp increase from 1.5 million in 2008/09.
Based on the report, without decisive action to address poverty as a fundamental cause of poor health, ministers will fail to create a sustainable healthcare system for the future. MPs have outlined specific measures needed to guarantee adequate retirement incomes for all citizens.
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|The Government is being called to take action over pensioner poverty
Furthermore, committee insists ministers must establish and commit to a baseline retirement income that ensures every pensioner can maintain a respectable quality of life.
Their recommendations include developing a comprehensive plan to help all retirees achieve this financial threshold, with the state pension serving as the foundation of governmental support.
The report advocates for an integrated approach spanning multiple departments, arguing that addressing elderly poverty requires coordination beyond the Department for Work and Pensions alone.
Committee chairwoman Debbie Abrahams stated: "Ultimately, the Government should decide what it thinks is enough for a dignified retirement, and then work to ensure that all pensioners are on at least that level."
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PA | MPs are calling for action
The benefits system designed to support struggling pensioners remains severely underutilised, with approximately 700,000 eligible households failing to access Pension Credit.
This benefit, valued at up to £4,000 annually, has seen uptake rates stagnate between 61 per cent and 66 per ecnt over the past decade. MPs have demanded a comprehensive uptake strategy for England before 2025 ends, describing the persistent low claiming rates as "a scandal".
As well as this, the committee proposes introducing a tapered system to eliminate the current "cliff-edge effect" that penalises those marginally above income thresholds.
Present regulations mean some retirees earning slightly more than eligibility limits find themselves financially worse off than those with lower incomes. Pension Credit serves as a gateway to additional support including housing benefit, council tax assistance, energy discounts, free TV licences, dental treatment help, and Winter Fuel Payments.
The committee's analysis reveals that relative poverty amongst pensioners, defined as income below 60 per cent of the national median, affects 1.9 million individuals or 16 per cent of all retirees.
Financial hardship has intensified dramatically, with the percentage of pensioners facing severe deprivation - those below 75 per cent of the Minimum Income Standard - jumping from 5.9 per cent in 2021/22 to 9.5 per cent in 2022/23.
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GETTY | Pensioners are worried about their retirement One pensioner quoted in the report described working until 75 but now surviving on just £10 weekly after bills, saying: "It's not living. I am having to cut down on everything and it is taking its toll on my mental and physical health."
Ministers have responded by highlighting their commitment to the triple lock mechanism, projecting state pension increases of up to £1,900 annually by parliament's end.
A Government spokesperson confirmed that their recent campaign has resulted in approximately 60,000 additional pensioner households receiving Pension Credit, averaging £4,300 yearly.
Emma Douglas, a wealth director at Aviva emphasised the pensions industry's role in helping people build lasting financial security, noting many will manage finances into their nineties. She revealed Aviva and Age UK are developing a "mid-retirement MOT" to support ongoing financial resilience throughout retirement.